Rostelecom to offer buyout ahead of mobile spin-off
MOSCOW (Reuters) - Russian state-controlled telecoms operator Rostelecom (RTKM.MM) will offer to buy out minority shareholders who do not support the proposed spin-off of its mobile assets, the company said on Wednesday.
The spin-off is part of a strategy shift that will see the former fixed-line monopoly focus on fixed broadband, pay television and media while putting its mobile assets under the management of a partner.
According to reports, Rostelecom plans to contribute its wireless business to an alliance with Tele2 Russia - a former unit of Sweden's Tele2 (TEL2b.ST) now owned by VTB (VTBR.MM) and investors led by banker Yuri Kovalchuk, a long-time associate of President Vladimir Putin.
The combination of the fourth- and fifth-largest mobile phone operators is expected to create a stronger rival to market leaders MTS (MBT.N), Megafon (MFONq.L) (MFON.MM) and Vimpelcom (VIP.O).
Rostelecom's board will set a price for the buyout and call an extraordinary shareholder meeting to vote on the spin-off of its mobile assets - including data-focused LTE licences - into an entity called RT-Mobile on November 19, it said in a statement.
The board will also discuss the company's strategy through 2018, the company said.
Its preferred shares (RTKM_p.MM) gained 2 percent on the news while its common stock (RTKM.MM) was flat.
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